Knight Capital Implosion: The Latest Wall Street Alarm Bell That Everyone Will Ignore – Yahoo  “The Knight Capital disaster, along with the many technical problems that have preceded it, should be taken as a sign of how much unseen technology risk has entered the financial system in recent years, Patterson says. Computer trading systems and exchanges have now gotten so complex that the the next Knight Capital may be a ‘Too Big To Fail’ bank, which wakes up to find that a similar ‘glitch’ has blown a multi-billion-dollar hole in its balance sheet. Unlike Knight Capital, that glitch will necessitate another taxpayer bailout and further undermine confidence in the global market system. Regulators and Wall Street should be terrified by what happened to Knight, Patterson says. But, most likely, as with other warning signs, this latest technology problem will just lead to discussions that will then go nowhere.”

Fiscal Cliff Looms Large As Congress Leaves Town – Fiscal Times  “A much-reviled Congress has now departed for a five week vacation – leaving behind a mountain of unfinished work as well as renewed anxiety that lawmakers and President Obama will be unable to get their act together in time to avoid slipping off the fiscal cliff at the end of the year.”

Economic Reasons for “Generation Squeezed” – Washington Post  “The young (and I draw the line at 40 and under) face two threats to their living standards. The first is the adverse effect of the Great Recession on jobs and wages. Even if this fades with time, there’s the second threat: the costs of an aging America. It’s not just Social Security, Medicare and Medicaid – huge transfers from the young to the old – but also deferred maintenance on roads, bridges, water systems and power grids. Newsweek calls the young ‘generation screwed’; I prefer the milder ‘generation squeezed.’”

S&P Downgrade: One Year Later, a Message Unheeded – Fiscal Times  “What little difference a year makes. On August 5, 2011 — one year ago today — Standard & Poor’s shook global markets and rattled the U.S. political establishment by downgrading the federal government’s credit rating from AAA to AA+. Yet despite the high drama surrounding the move, dramatically little has changed in terms of the fiscal and political issues S&P pointed to in making its move.”

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